Sonic out with a downgrade, this morning.

That’s about 10% lower than street, for FY25, so a reasonable miss to consensus, especially for a stock trading at 23x forward earnings.

All of those positive “we will have a much stronger 2H because of XYZ” comments looking very wide of the mark now (from the Feb result).

We have long liked Sonic, thinking it a high quality business, and viewed, at the time of the Feb result, the below management commentary about “we are at the bottom” quite positively…

…and thought that the number of earnings growth drivers “strong top line growth, cost out initiatives, M&A” and the like, would help SHL hit their numbers. That has proved wrong.

It doesn’t change the long run view, for us, but it will be an unpleasant hold for now.

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